JPY crosses/USD/JPY

AUD/JPY: Starts the day with very heavy feel

Since my last post on the AUD an hour ago, AUD/JPY has fallen by 20 pips and still looks heavy. There are some rumours of investment bond redemptions today which would normally lead to some increased Yen buying at the Tokyo fix, but I have no confirmation on this (perhaps someone can help on this news?). I’m still a little baffled as to why the market bought USD/JPY so aggressively on yesterday’s election news, as this had been widely reported over the previous days, but perhaps the market was simply bullish and wanted a reason to buy.

  1. One thing that is also puzzling is the US yield has been dropping which should be favoring JPY. It seems the correlation breaks down…

  2. I think the 84.14 via my platform FXCM trading station was a stop hunt and the real major resistance is at the 83.60 area. We gotta watch that 81.50 level in AUD/JPY to see if we can break down and test the lows of 79.45 which has been tested 5 or so times and held firm.

  3. I’m a perennial yen bear, but I too was rather perplexed by the USD/JPY move yesterday (use the rally to sell some). Pretty sure it will dip into the mid 79’s again.

    Yesterday before the moved I had glanced at an iPhone USD/JPY chart (60 minutes, showing some basic MAs, 21, 55 and 100 period). It just looked as if the MAs were just starting to roll upwards after the recent dip and I thought it might move a little higher. This was around 79.50. Then the election talk started afterwards. To me it seemed the short term technicals triggered it and the news then gave an excuse for others to jump on board. Time will tell, but Japanese politicians are totally ineffective really aren’t they?

  4. Yes indeed they are fxgai, but all this talk of an LDP win and unlimited Yen printing seems very premature? Hard to imagine Noda call an early election just to get trounced? You know the scene better than me but does seem strange?

  5. Judging from what I saw on breakfast TV here in Japan you can be sure that Noda will dissolve the lower house on Friday and we’ll have elections in December. If I my paraphrase what he said to Abe in the Diet yesterday: “Let’s get it on then, aye!”.

    No doubt Noda’s DPJ will be trounced, but at this stage the DPJ is fragmenting as it is (barely maintaining a majority even now) and Noda wouldn’t be able to do anything other than quack if he were to stick around. He already promised an early election to the opposition earlier this year in order to get their support to push through the sales tax increase bill.

    After an election the LDP probably won’t command an outright majority either, so I’m not convinced they can get support to re-write the BOJ law and essentially destroy what semblance of independence it currently has. If the LDP can do that (and is serious?), then unlimited yen printing could be on the cards, but I’ll wait and see what happens in the election before gambling on that part of the story.

Leave a Reply

Your email address will not be published. Required fields are marked *